Never too old or young to save

Rachel Thrussell, Head of savings at moneyfacts.co.uk comments: “Amongst all commotion of saving rate rises following the November base rate increase, a pattern has emerged with providers rewarding their young or older savers with some of the better deals.

“Stroud & Swindon BS, Northern Rock and Market Harborough BS have launched market leading over 50s accounts, while Nationwide BS and Hanley Economic BS have passed on an increase of 0.30% and 0.55% respectively to their cash CTFs.

The Over 50s Savers

“Since it really took off in 2005, the over 50s savings market has seen its ups and downs, with many new providers dipping in and out of this market. Today there are 30 institutions offering over 36 accounts specifically targeted at savers aged over 50. With the recent launch of three best buy accounts, this is good news for those savers who are eligible.

However, consumers opting for these specialist accounts should not assume they are getting the best deal available in the market as, although the rates may be competitive, better deals may be found in accounts open to all ages.

“Providers may be looking at this potentially affluent, niche market for increased savings balances, or as a tool to raise their companies’ profile as a ‘good’ savings provider without the need to extend their offer to the mass market.”

Child Trust Funds

“Pleasingly, with the exception of Ipswich BS (0.10% rise), CTF providers have passed on the at least the full 0.25% increase. This has not been the case within other savings markets, with less than 50% of providers passing on exactly the quarter point rise across their savings range.

“The take-up of child trust funds is still far from its maximum, so it is pleasing to see that the providers are keen to reward CTF savers. It is not often that we are given ‘free money’ from the Government, so it seems a little perverse not to make the most of it. Cash CTFs offer competitive rates of interest, are risk free and allow additional savings of up to £1,200 per year.

“There are savings products to match each stage of your life, from infancy to retirement. Make sure that you make the most of any deals available for your specific age group and any tax free saving allowances. And take the time to review your savings plans regularly, as your plans, needs and financial aims are sure to change over time. You are never to old or young to start saving.”